Almost 50 percent of the 22 million ton a year of crude oil from the Middle East and Africa that is scheduled to begin flowing soon through Kyaukphyu is intended for a new refinery in the Kunming, the capital of Yunnan. But Chinese public opposition and environmental issues have held up construction of the refinery, and some reports now say it might be canceled and forced to move elsewhere.

The refinery at Anning, just outside Kunming, was due to be completed early in 2014, and was supposed to take 200,000 barrels per day (bpd) to make gasoline and diesel and to feed an adjacent petrochemicals plant. The pipeline’s maximum transmission capacity is 440,000 bpd, its builder and majority owner China National Petroleum Corporation (CNPC) has said.

Thousands of Chinese residents of Kunming staged rare street protests in May and June, opposing the refinery and CNPC’s plans to produce 500,000 tons of paraxylene (PX), a carcinogenic chemical used in polyester and plastic bottle manufacturing.

CNPC claimed an environmental assessment report found no danger of air pollution to the surrounding urban population, but, in August, China’s Ministry of Environmental Protection announced it was suspending environmental approvals for new refinery projects planned by both CNPC and another Chinese state-owned oil company, Sinopec, “because they had failed to meet their [air pollution] emissions reduction targets last year,” international energy analysts Platts said in October.

Until now, it was unclear what would happen to CNPC’s Kunming refinery project, but last week a diplomat at China’s Burma Embassy was quoted saying it was being relocated.

“It is not known when operations [of the Burma oil pipeline] will begin because the construction of an oil refinery has been delayed,” Embassy Third Secretary Huo Wenjun was quoted by the Myanmar Times. “First the refinery was to be built in Kunming, but now it will be elsewhere in Yunnan province.”

CNPC in Beijing declined to speak to The Irrawaddy about the refinery delay and its implications for the pipeline and would only make this brief statement: “Preparations are still being made to begin the operation of the oil pipeline in 2014.”

CNPC is also building oil storage tanks at its Kyaukphyu transshipment terminal, according to the local NGO Kyaukphyu Social Network.

There will be 12 tanks each with a capacity of 100,000 cubic meters, according to a report by Reuters in May. That would provide storage for up to 7.5 million barrels, or the equivalent of 17 days operation of the pipeline at full capacity.

“In theory CNPC could just ship the oil coming through the pipeline on to other destinations in southwest China,” regional oil and gas industries analyst Collin Reynolds in Bangkok told The Irrawaddy. “The problem with that is that pipeline infrastructure within Yunnan is still limited.

“Unless CNPC can quickly shift oil pumped through the Myanmar [Burma] pipeline there could well be a logistics backlog at its coastal terminal,” he said.

The Kunming refinery was meant to supply more than 50 percent of the city’s gasoline and diesel needs, and feed other cities in Yunnan Province which at present have to import fuel oils from other Chinese provinces.

Meanwhile, the Kyaukphyu Social Network is campaigning for information on safety measures to prevent or limit an oil spill at Kyaukphyu and surrounding coastal waters, as well as the return of access to fishing grounds which are now barred to the local community.

“The Network has requested information from the President’s [Thein Sein’s] office, CNPC and the China Embassy on the issue of an oil spill but so far there has been no response,” Naing Htoo of Washington-based Earth Rights International’s Southeast Asia office told The Irrawaddy.

The CNPC Burma pipeline is the first to pump oil into China that is not linked directly with a field. The added cost of bringing the crude by ship to Kyaukphyu before offloading and transferring make it an uneconomical operation, said the Beijing business magazine in Caijing in a special report.

In addition, CNPC is supposed to pay the Naypyidaw government US$13.6 million per year “rent” for the pipeline, plus US$1 for every ton that flows through it. That’s US$22 million—but only if it operates at full capacity.

The government of Burma should immediately release ten Arakanese activists convicted of violating Burma’s Law on Peaceful Assembly and Peaceful Procession after protesting a Chinese-led natural gas project in western Burma, four nongovernmental organizations said today. On 26 September, the ten activists were sentenced to three months in prison for their participation in a peaceful protest against adverse impacts of the transnational gas project on 18 April on Maday Island in Burma’s western Arakan State. The Shwe Gas Movement, Burma Partnership, Human Rights Education Institute of Burma and Fortify Rights International called today for the immediate release of the activists and for the urgent amendment of the controversial law.

“No one should be imprisoned for exercising their human right to peaceful assembly,” said Wong Aung, Coordinator of the Shwe Gas Movement. “The right of assembly is crucial, especially since there are no effective legal mechanisms available for voicing concerns over land loss and labor complaints.”

The ten villagers were charged with violating Article 18 of the controversial assembly law after protesting negative impacts of the Shwe Gas Project without a permit. The same law has been used to arrest and prosecute scores of other activists in Burma in the last year, including Naw Ohn Hla, a prominent Burmese activist who was arrested on 13 August 2013 for leading a peaceful protest against the controversial Chinese-led Letpadaung copper mine in Burma’s Sagaing Region. The law requires a written permit from local authorities for any gathering of more than five people. Violations are punishable by up to a year in prison.

“This repressive law has been selectively enforced to target activists who highlight detrimental impacts of high-profile foreign investments,” said Matthew Smith, Executive Director of Fortify Rights International. “The permit-granting provisions in the law are inconsistent with international human rights standards and should be immediately amended.”

On four occasions Arakanese activist Tun Kyi, 33, sought permission from local authorities on Maday Island to protest the negative impacts of the Shwe Gas Project. The authorities denied each request on the grounds of Section 144 of the Burmese Penal Code, which established a state of emergency in Kyaukphyu Township, Arakan State, for over one year, granting the military, local government, and police sweeping powers. The emergency law was invoked in response to ethno-religious violence in Arakan State that began in June 2012. It has since been frequently leveraged by state authorities to prohibit public gatherings, despite the fact that no violence occurred on Maday Island.

After being repeatedly denied a permit—twice in December 2012 and again in March and April 2013—Tun Kyi and the other Maday Islanders decided to proceed with the demonstration, originally scheduled for 11 April. On 10 April, riot police arrived on Maday Island, visited homes and interrogated villagers for their suspected involvement in the protest plans. Tun Kyi and other community leaders negotiated with the local authorities to postpone the protest, which they rescheduled per a spoken agreement with the authorities that an unpermitted peaceful protest would not be met with harsh consequences.

On 18 April 2013, over 400 Arakanese villagers met at Ywar Ma monastery on Maday Island, marched to the offices of the China National Petroleum Corporation and demanded an immediate halt to the Shwe Gas Project. The authorities responded with swift and severe action. Tun Kyi and nine other organizers were detained, questioned, and subjected to a protracted series of court hearings, effectively preventing further acts of resistance.

“Companies operating in Burma should adopt ‘do no harm’ policies and practices. This is best done by adhering to the UN Guiding Principles on Business and Human Rights, including taking steps such as consulting with local communities, conducting adequate social and environmental impact assessments of development projects, and offering fair compensation to local communities,” said Khin Ohmar, Coordinator of Burma Partnership.

The Shwe Gas Project is a Chinese-backed development designed to transport natural gas and crude oil to southern China. Its two pipelines begin at Kyaukphyu and end in Kunming, China, cutting across Arakan State, Magwe Region, Mandalay Region, and northern Shan State, where deadly armed conflict continues between the Burmese army and the Kachin Independence Army, as well as numerous local militias. The Arakanese protesters demanded postponement of the Shwe Gas Project until local communities were guaranteed fair compensation for confiscated lands, electrical service for all homes and public buildings on Maday Island, infrastructure development, and fairly paid, secure job opportunities for local people. Similar complaints have been voiced in all areas affected by the pipeline, but this was the first mass protest against the Shwe Gas Project ever held in Burma.

The accused were initially arraigned and released on bail on 13 May, and have since been called to court hearings thirteen times. During the course of these prolonged procedures, opening ceremonies were held for the now-completed Shwe Gas pipeline and the government announced an open tender for a Special Economic Zone in Kyaukphyu Township.

“The authorities have used multiple court hearings to intimidate and attempt to weaken the resolve of activists in Arakan State and elsewhere, all while pushing their economic agenda forward, whereas in fact they should be protecting the legitimate human rights work of such activists, in accordance with international norms on the protection of human rights defenders,” said Khin Ohmar, Coordinator of Burma Partnership. “The use of martial law has provided an additional measure for the authorities to prevent dissent. These men were convicted of ‘unlawful’ activities, but they have done nothing wrong and should be released immediately.”

On a 15 July visit to London, Burma’s President Thein Sein said all political prisoners in Burma would be freed by the end of the year. Since then, numerous activists throughout the country have faced arrest for exercising their human rights.

“It’s difficult to take the president at his word when the authorities are so busy creating new political prisoners,” said Khin Ohmar. “If President Thein Sein is serious about reform, he’ll release all political prisoners immediately and initiate amendments to the assembly law so that there aren’t any new ones.”

“This verdict, and not the actions of the accused, is unlawful and a clear violation of human rights,” said Aung Myo Min of Human Rights Education Institute of Burma. “We demand their immediate release and amnesty.”

]]>http://www.shwe.org/burma-release-ten-arakanese-activists-amend-peaceful-assembly-and-peaceful-processions-law/feed/0Drawing the linehttp://www.shwe.org/drawing-the-line/
http://www.shwe.org/drawing-the-line/#commentsSat, 28 Sep 2013 04:25:14 +0000shweadminhttp://www.shwe.org/?p=4694
The Shwe Gas project, the largest extractive project in Burma, set to earn US$54 billion for the Burmese government,1 has just begun transferring Burma’s natural gas to China. As the first such project to become operational under the new quasi-civilian government, its management will set the precedent for how future extractive projects will be carried out as Burma opens up for investment and resource bidding. As it stands, the standard is not good.

The Shwe Gas project refers to a number of related developments reaching from Burma’s Arakan coast to Kunming and Nanning, China. The major components of the project are offshore natural gas rigs, an onshore natural gas terminal, a deep sea port, a crude oil storage facility, and two pipelines that span Burma diagonally, delivering gas and oil directly to Southwestern China. The project has effectively enabled others, such as the development of a Special Economic Zone and a transnational railway linking Burma’s western coast to China.

Given that Burma’s transition from military dictatorship to a quasi-civilian government is still in an early and precarious stage, some of the abuses associated with this project are ongoing, and new problems have emerged. The primary direct consequences of the Shwe Gas project are land confiscation, labor abuse, loss of livelihoods and environmental degradation. In northern Shan state, these core problems have reignited frequent conflict between the Burma Army and four separate ethnic armies, which will continue intermittently unless these core problems are addressed in a political settlement.

Land reform laws passed in 2012 have failed to protect the rights of smallhold farmers, leaving them even more vulnerable to unfair acquisition than before and providing no effective system of recourse. Laws governing fiscal transparency and environmental responsibility are virtually non-existent (our recent briefer “Good Governance and the Extractive Industry in Burma” provides an analysis of the current regulatory framework, or lack thereof).

Furthermore, Burma has retained legislation that prohibits dissent; the Peaceful Assembly and Peaceful Procession Law, Unlawful Association Act and several restrictive media laws continue to silence local voices in the face of corporate misconduct.

But beyond failures of national legislation lies a more fundamental problem: the constitutional denial of states’ local authority over resources precludes fair distribution and development. The profits of the Shwe Gas project are set to go straight to the Union government – bypassing some of Burma’s poorest communities – with no requirement of revenue transparency. Without establishing a true federalist system providing authority to ethnic states and regions, communities will not be satisfied with the implementation of new national measures, hence conflicts and civil wars will remain unresolved.

Now the Shwe Gas project is going into operation, as other similar developments are readying to do the same. Other projects – the hydropower dams on the Salween and Irrawaddy rivers, the Latpadaung copper mines, and the development of Special Economic Zones all over the country, to name a few – are forging ahead without protective measures. The people of Burma must decide: will we accept the existing standard of abuse by foreign investors without any re-assessment, safeguards, or benefits for local people?

Investors are clambering at our door. They want our resources. The Shwe Gas project can set the precedent for how similar developments are implemented and governed. We must stand up now to demand that operations be postponed until an acceptable standard is created to safeguard communities and ensure equitable distribution of both resources and revenue.

]]>http://www.shwe.org/drawing-the-line/feed/1Good Governance and the Extractive Industry in Burmahttp://www.shwe.org/good-governance-and-the-extractive-industry-in-burma/
http://www.shwe.org/good-governance-and-the-extractive-industry-in-burma/#commentsTue, 16 Jul 2013 15:09:08 +0000shweadminhttp://www.shwe.org/?p=4670
Burma has been praised in recent years for the return to a civilian government and for the implementation of legislative reforms; international economic sanctions are being lifted and President Thein Sein became the first Burmese politician to enter the White House since 1966. However, this common picture does not reveal the depth and complexity of the current situation in Burma.

Now is a crucial time. Despite taking superficial steps towards reform, encounters with local populations show that little substantial change in terms of extensive environmental degradation, human rights, and government transparency is actually being witnessed on the ground. On the contrary, in the face of frequently discussed reform, issues such as civil war, ethnic cleansing, extensive human rights abuses, blatant disregard for rule of law, and other contentious topics continue to characterize life for significant proportions of the population. All the while, existing legislation continues to centralize government power, restrict basic human freedoms, and deter those inside from establishing adequate, equitable and legitimate social change. In this light, a sound understanding of Burma’s existing legal framework is vital to truly comprehend the state of affairs.

As the country begins to open up for the first time in more than 60 years, foreign investors and energy consumers worldwide are beginning to look progressively towards Burma and its rich natural resources. Aimed at policy makers, investors, corporations, various governments, intergovernmental groups and other stakeholders, this briefer seeks to highlight the necessity of a sound domestic legal framework in Burma through a critical analysis of the current limitations and implications thereof. Burma’s Constitution and legislation must not solely represent a centralized government, but simultaneously protect the people and environment of Burma. Pending the essential policy changes recommended in this briefer, natural resource development, foreign direct investment and other relevant activities, particularly in the extractive industry, should be put to a halt. Any parties engaging in these activities choose to ignore serious environmental, social, and transparency related issues. They may, therefore, be accused of lacking the due diligence necessary to ensure good global governance in Burma.

Hundreds of residents protested Thursday against a China-backed petroleum pipeline project in western Burma’s Rakhine state over inadequate compensation and demands that the project developer provide better transportation infrastructure and higher salaries for local workers.

Around 400 people gathered to protest the Shwe Gas Project in Maday Island off the coast of Kyaukpyu town in the Bay of Bengal, also complaining that the project had polluted rivers which fishermen in the area had depended on for their catch.

“We protested today because we want the world see that the project is not making the lives of local residents better—it has only made things worse,” protester Tun Kyi told RFA’s Burmese Service.

The Shwe Gas Project is a joint venture between Beijing’s state-owned China National Petroleum Corporation (CNPC) and Burma’s national petroleum company Myanmar Oil and Gas Enterprise.

A conglomerate of two other companies from Burma, another company from China, two firms from India and one from South Korea also have a stake in the joint venture South East Asia Gas Pipeline Co, Ltd (SEAGP).

Tun Kyi said that residents had received compensation payment for only half of the area expropriated for the project, including a mountain owned by local residents from Maday Island.

But CNPC representatives claimed the company had made the full payment, he said, suggesting that part of the compensation has been unaccounted for.

“The Chinese businessmen are treating the local people unfairly. They occupied more than 400 acres (162 hectares) and we received compensation for only about 200 acres (81 hectares),” he said.

“No one knows where the rest of the compensation went. A lot of residents have lost their property.”

Protesters also wanted the company to build better transportation infrastructure from the crude oil jetty at Maday Island to the nearby villages of Kyauttan, Ywarma, and Panhteinse, and supply the area with electricity before continuing with the project.

They also called on CNPC to create more job opportunities for local workers and to pay them at international rates.

Demands unmet

Tun Kyi said that residents went ahead with the protest on Thursday even though the authorities refused to give them a permit to hold the gathering. They had applied for the permit in December last year, he said.

“First, we applied to the township authorities to protest about our rights being trampled on, but they wouldn’t let us. Then we applied to the state-level authorities to protest, but our application was rejected again,” he said.

When the group gathered at a nearby monastery at around 10:00 a.m. to launch the protest on Thursday, he said, the Kyaukpyu township administrator told them that CNPC had agreed to meet with them to discuss their demands.

But following a meeting with CNPC representatives, the protesters remained unsatisfied and decided to press on with their demonstration at around 2:00 p.m., marching two miles (3.2 kilometers) to the company’s headquarters in Kyaukpyu town while the authorities looked on.

“They didn’t [stop us]. We had heard that we would be shot if we entered the CNPC compound, so we didn’t ask to go inside. We just stood in front of the office shouting, ‘We don’t want CNPC’ and ‘We residents won’t shut our mouths for CNPC’,” Tun Kyi said.

He said that the township administrator and chief of police approached them and asked them to return to their homes, but the protesters said they would not leave until their demands were met.

“We asked them how they could help us to solve this problem. They told us that they would meet with someone from the CNPC on Friday at the [company’s] Social Eco office to discuss our demands.”

Protests to continue

Tun Kyi said that CNPC had created the office to negotiate with the community and to meet with township administrators, but he had little faith in the company’s willingness to accept his group’s demands.

Around 70 percent of local residents are fishermen, but we can’t even support ourselves that way because CNPC has thrown debris from the construction into our rivers.”

As a result, many of the area fishermen have gone to work as laborers on the pipelines, but only make around 90,000 kyat (about U.S. $100) a month—30,000 kyat (U.S. $34) of which is kept by the construction companies for meal costs, according to a report by the Irrawaddy online journal.

While contracts show that the workers are paid 9,000 kyat (U.S. $10) per day, they actually receive only 3,000 kyat, with most of the rest going to the local agents who found them employment with the pipeline companies, Irrawaddy said.

Tun Kyi said the protesters had vowed to continue protesting if CNPC didn’t agree to their demands at Friday’s meeting and would post leaflets outlining their grievances.

He said they wouldn’t bother applying for permission to continue protests because they know that the authorities would not grant it.

“They might arrest us, but they won’t dare do it publicly.”

Local blowback

Construction on the Shwe Gas Project began in 2009 and is slated for completion in May this year.

CNPC is constructing two pipelines to transport oil purchased in the Middle East and gas purchased in Burma’s Shwe Bay to China, beginning in September.

Each pipeline will cost U.S. $2 billion to build. Burma will earn U.S. $7 million per year in annual right-of-way fees to transport the fuel through its territory.

The oil pipeline is aimed at diversifying China’s crude oil imports routes from the Middle East and Africa, and avoid traffic through the Strait of Malacca. Oil storage tanks will be built on an island near Kyaukpyu.

The Shwe Gas Project has created a controversy in much the same way as the China-backed Myitsone Dam project did in Burma’s Kachin state two years ago—angering critics who saw the scheme benefitting the country’s northern neighbor while negatively affecting the lives of local inhabitants.

The megadam, which was designed to generate electricity mostly for export to China, was suspended by Burmese President Thein Sein’s reformist government after taking power from the former military junta in March 2011 due to public opposition.

Reported by Min Thein Aung and Zin Mar Win for RFA’s Burmese Service. Translated by Khet Mar. Written in English by Joshua Lipes.

A group of farmers from Shan state issued a public call on Friday demanding that Burma’s government remove sections of the Shwe gas pipeline built on their land.Representatives of the Northern Shan Farmers Committee sent an open letter to the Shan state parliament in Taunggyi citing environmental and human rights concerns regarding the twin oil and gas pipelines which are currently under construction.

When completed later this year the pipelines will transport gas and oil from Burma’s Arakan (Rakhine) coast to China’s Yunnan region, along some 800 KM of land largely expropriated from local farmers, including those from six townships in Shan state.

A report released on Friday by a coalition of Shan civil society organisations led by the Shan Human Rights Foundation (SHRF), that was timed to coincide with the petition highlights the pipeline’s numerous controversies. This includes the seizures of more than 2000 acres of land and what critics call an inadequate and completely non-transparent compensation scheme.

According to Sai Khur Hseng, a spokesman for SHRF many of the farmers who received compensation for their land were forced to sell against their wishes and then compelled to hand 10 percent of the funds they received to local officials who demanded kickbacks. The amounts of compensation distributed to the farmers varied widely depending on where their farms were.

Farmers in Namkham closest to the Chinese border received 14 million Kyat per acre. While those further south in Namtu and Hsipaw received 3 to 5 million Kyat per acre. But Sai Khur Hseng and his collegues say even the largest amount of compensation paid out to the farmers was below market rates and completely insufficient.

Another major concern for the farmers is the environmental impact that the pipeline will have on the land their land which the pipelines will pass through. Pipelines throughout the world are infamous for leaking and contaminating nearby farm land. The Shwe gas pipelines appear to be at serious risk for leaks in Shan state as they cross heavy salt deposits north of Hsipaw.

The farmers worry that the salt will corrode the pipes, a concern that has so far been ignored by both the Burmese government and and China National Petroleum Company (CNPC), the state-owned Chinese firm leading the consortium building the pipeline project.

The farmers say they were never invited to public consultations about the pipeline project nor were they given any opportunity to voice their concerns.

“We feel like a time-bomb has been placed under our homes,” said Nang Mwe Hseng a farmer from Namkham who was quoted in the press release accompanying the report. “Not only have our lands been taken without our consent, but our lives are now under threat,” he said.

The ongoing fighting in northern Shan state between government forces and armed ethnic groups is also a major concern for those monitoring the pipeline’s development. As recently as late last month clashes between Burma’s military and forces from the Kachin Independence Organization (KIO), took place in an area next to the pipeline corridor.

Throughout the past few years the military has also fought frequently with the troops from the Shan State Army North and the Ta’ang National Liberation Army (TNLA) in territory close to the pipeline. The continued fighting in Shan state poses a major risk for the pipeline, warned an oil industry security specialist during a recent interview with the Interfax news service.

“Running an over-ground gas pipeline in a location where an armed conflict taking place is absolutely unadvisable; an explosion could easily be caused by a stray bullet. If the pipeline is penetrated it will explode, causing it – and the surrounding area – significant damage” said Michael Oxlade, a consultant with Westminster International, a UK based firm that specializes in providing security services for global oil operations.

Much-delayed plans to kick-start an international scramble for oil and gas on Burma’s Bay of Bengal coast are due to be unveiled this month, but the Ministry of Energy has yet to provide any details of the license auction, or the level of transparency which will be in place to oversee it.

Up to 20 offshore blocks will be offered for exploration licenses, according to the ministry. However, potential foreign bidders still do not know whether they will be permitted to hold a full license—with a 100 percent shareholding—or take on domestic partners.

Foreign firms seeking onshore licenses must have a local partner, but offshore exploration requires heavier investment and a level of technology unavailable to Burmese companies, say industry analysts.

The auction was meant to take place last September but was postponed amid foreign concern about the transparency in the bidding process and the involvement of an unreformed Myanma Oil & Gas Enterprise, widely seen as a tool of the former military regime.

Four weeks ago Minister of Energy Than Htay said the government had taken the “necessary actions” to ensure Burma’s oil and gas sector fulfilled the standards of the Extractive Industries Transparency Initiative (EITI).

Based in Oslo, Norway, EITI is an international body which overseas financial openness and fairness in the industry.

According to EITI, however, Burma is still only at the stage of preparing to become a member and has yet to apply for inspection to qualify for candidate membership.

“Revenue from oil and gas is the largest source of foreign income for the government of [Burma],” said an EITI statement. “According to the IMF, revenue from gas will likely increase by 85 percent over the next three years as the Shwe gas project becomes operational.

“By preparing to implement the EITI, the government is taking practical steps to ensure that a robust framework is in place for dialogue about the governance of these natural resources.”

Analysts say the recent outbreak of sectarian violence between Buddhists and Muslims in Burma, renewed fighting in Kachin State and a major clean out of corrupt and incompetent senior officials by President Thein Sein may have distracted the government from the exploration licensing auction.

The president has in recent days forced the dismissal of key leading officials in the Ministry of Finance and Revenue, the Trade Department, the Department of National Economic Planning and Development and the Commerce Department as part of a dragnet to clean up the government.

“There is still an air of uncertainty around the proposed offshore oil blocks auction due this month,” industry analyst Collin Reynolds in Bangkok told The Irrawaddy on April 3. “We still do not know any details of the auction, such as how many blocks, locations and terms.

“It all could go ahead, however, Burma is under intense scrutiny from the international community in view of its recent past and the close financial involvement of the former regime.”

Chinese national oil companies are expected to be among bidders for Burma’s offshore blocks, where large volumes of natural gas are reckoned to be under the sea.

China’s interest is linked to its plans to use Burma as a conduit for oil and gas via the two pipelines it is building through the country from the central coast terminal it has developed at Kyaukphyu, where it also has proposed to bring a freight railway line from its landlocked Yunnan Province bordering Burma.

“Not only will these pipelines become a reliable means of delivering energy imports from the Middle East and Africa directly to China, without having to navigate the narrow Strait of Malacca and increasingly volatile South China Sea, they will also provide China a potential direct line to over 20 new offshore oil and gas exploration blocks that will go up for international auction in April,” said Eric Draitser, an American geopolitical analyst writing in the Asia Times.

One of the pipelines is due to begin pumping gas from the Shwe field in the Bay of Bengal in the middle of this year, but fighting between a Kachin militia and the Burmese army near the northern end of the pipeline just before it enters Yunnan has raised doubts about security.

A report by Natural Gas Daily, produced by the Russian news agency Interfax, quotes a security consultant saying it could be highly dangerous.

“Running an over-ground gas pipeline in a location where an armed conflict is taking place is absolutely unadvisable. An explosion could easily be caused by a stray bullet. If the pipeline is penetrated it will explode, causing it and the surrounding area significant damage,” Michael Oxlade, senior security consultant at Westminster International, was quoted by Interfax as warning.

Westminster International is a UK company run by ex-British Army officers which provides advice on security for all kinds of installations, including energy infrastructure.

Natural gas exports are becoming an increasingly important source of income for the Thein Sein government to finance its economic reforms and also reportedly to directly take part in new oil and gas explorations.

Income from gas exports in the 2012-13 financial year ended March 31 were expected to reach almost US $4 billion, according to the Ministry of Commerce, although official figures have yet to be published.

Next year, this source of income will be further boosted by the Shwe gas sales to China—if there are no pipeline mishaps—and also from gas bought by Thailand from a new field in the Gulf of Martaban to the east.

A leading oil security expert has weighed in on the potential dangers of operating twin gas and oil pipelines in northern Shan state while fighting between the Burma army and the Kachin Independence Army (KIA) is ongoing near the pipeline route.

A long stretch of KIA- controlled territory lies along the route of the Shwe gas project’s twin oil and natural gas pipelines that are currently under construction. When completed, the pipelines will send gas and oil from Burma’s Arakan (Rakhine) coast to China’s Yunnan region, a total distance of nearly 800 KM.

Although the Shwe Gas Project may not be the primary reason behind the army’s offensive against the KIA, observers speculate it has added fuel to the fire.

A security consultant with Westminster International; a firm that provides security for oil and gas projects, told Russia’s Interfax news agency last week they had serious concerns about the risks involved with operating the Shwe pipelines while the conflict is ongoing in the region. “We would strongly advise our clients against doing this,” said Michael Oxlade.

“Running an over-ground gas pipeline in a location where an armed conflict taking place is absolutely unadvisable; an explosion could easily be caused by a stray bullet. If the pipeline is penetrated it will explode, causing it, and the surrounding area, significant damage.”

Since the Kachin conflict restarted on June 9, 2011 fighting has repeatedly broken out near where the pipeline will be built – an area controlled by KIA Brigade 4.

A month before the conflict began; a senior commander for the Kachin Independence Organization (the political wing of the KIA) foretold that the pipeline would be used by the military for its own strategic purposes – to crush ethnic armed groups like the KIO. “The pipeline will be a tool and an opportunity for the SPDC to eliminate the armed groups,” Lt-Gen Gam Shawng told the New York Times back in May of 2009.

Originally the initial pipeline route would have avoided most of the KIO’s territory; however in early 2011 the pipeline route in Shan state was significantly altered. Under the old route the pipeline was slated to continue east at Hsipaw and reach Lashio before heading north to Kunming, but under the new route the pipeline makes a near 90 degree turn at Hsipaw heading directly north into KIO territory.

An environmental coalition opposed to the pipeline project has uncovered that two firms hired to produce Environmental, Social and Health Impact Assessments (ESHIA) for both the oil and gas pipelines are Western owned. Activists with The Shwe Gas Movement have repeatedly written letters to the firms asking for copies of the assessments but neither firm has complied.

China National Petroleum Company (CNPC) – the state-owned firm spearheading the consortium that will build and operate pipelines – hired the Hong Kong branch of the UK-based Environmental Resources Management (ERM) to conduct the ESHIA for the oil pipeline, according to Shwe Gas Movement staff. International Environmental Management Co., Ltd. (IEM), a Canadian-owned firm based in Thailand, was also hired.

When the ESHIA was being produced it is unknown whether either of the firms predicted that the pipeline route would be engulfed in fierce fighting between the Burmese government and KIO.

]]>http://www.shwe.org/expert-warns-against-turning-shwe-pipeline-on-while-kachin-conflict-continues/feed/0China pushed to the brinkhttp://www.shwe.org/china-pushed-to-the-brink/
http://www.shwe.org/china-pushed-to-the-brink/#commentsTue, 05 Mar 2013 03:07:41 +0000shweadminhttp://www.shwe.org/?p=4587Last week’s media reports that the Chinese army was involved in intense training in the hills of Yunnan Province near the Myanmar border raised few eyebrows.

Marines of the People’s Liberation Army (Navy) pictured at Zhanjiang in 2006. (U.S. Marine Corps photo)

State news service Xinhua reported that Chinese army units were undergoing rigorous training in the jungle, mountains and rivers; moreover they were preparing “for real combat” and “to be victorious in battle”. Nonetheless, no red flags of warning were raised nor did the nationalistic Myanmar press become over-excited.

Beijing expressed its concern earlier this year when at least four artillery shells landed on Chinese soil during a Myanmar government campaign against the Kachin Independence Army (KIA) at its main base in Laiza, which straddles the Chinese border.

Chinese authorities are naturally worried that a continuation of the conflict results in another surge of refugees spilling over its border.

Myanmar government forces retain strategic hilltops outside Laiza. They have already proved their ability to launch air assaults with helicopter gunships and fighter jets, but would require Chinese airspace in order to overfly the town and bomb the Kachin stronghold.

The pressure of the siege has brought the Kachins reluctantly to the negotiating table. The last talks were on February 4 and a new round looks set for early March, peace broker Hla Maung Shwe told Mizzima on Monday. In the meantime, an awkward lull in fighting at Laiza perseveres though skirmishes continue in other parts of Kachin State.

But while both governments take all precautions to ensure that China does not become embroiled in Myanmar’s civil war, a second scenario looms which severely tests Chinese resolve to refrain from direct intervention.

The 700-mile-long Shwe Gas pipeline is due to be completed in May. Optimistic Chinese sources believe the oil and gas may start flowing from the deep-sea port at Kyaukphyu in the Bay of Bengal to China’s southwestern Yunnan in early June.

China’s controversial trans-Myanmar pipeline is now more than 70 percent complete. The remaining portion on the Myanmar side runs through northern Shan State where it will cross the border at Muse, a town currently under government control but in a pocket surrounded by Kachin outposts.

The KIA has stepped up campaigns of sabotage against Myanmar infrastructure over the last year. There is little to indicate that—if peace talks do not go their way—they would feel less inclined to disrupt the transfer of oil across their territory.

Tin Thit, the coordinator of the Myanmar-China Pipeline Watch Committee in Mandalay, is cited in NPR on Friday saying that although the Myanmar army will station soldiers in Shan State to protect the pipeline, this act could fuel the insurgency and threaten national security.

“If insurgents attack or blow up part of the pipeline, the Chinese could send troops into Myanmar to protect it,” Tin Thit is quoted as saying. “This would have a huge impact on our sovereignty.”

Washington-based NPR said that officials in both countries deny such a thing could ever happen. “Nonetheless, it’s a common perception among Burmese,” it reported.

Wong Aung of the Shwe Gas Movement told Mizzima on Monday that local resistance to the pipeline will prevent it opening as scheduled. “I am confident that China will not be able to complete the pipelines project as planned in May because some infrastructure development still needs to be completed, especially in the conflict area in northern Shan State,” he said. “The resentment and anger of the local people over the project are growing due to involuntary relocations and uninformed consent during the project activities.”

These are testing times for the Chinese government and its associated investors. The suspension of the Myitsone Dam and the Latpadaung copper mine project must have tried their patience. Losing the Shwe pipeline might push them to the brink.

Is it unrealistic to believe that Beijing would not order its troops across the border to protect China’s national interests? Has it already made a contingency plan for such a scenario? Some analysts have suggested that the Chinese have suddenly taken a renewed interest in arming their old allies, the United Wa State Army.

Several news agencies closely aligned with the Beijing government reported only last week that the Chinese military had last year contemplated using drones to assassinate drug kingpin Naw Kham. If Laotian authorities had not apprehended the Shan warlord in April and handed him over to their Chinese counterparts, would plans for a strategic strike in northeastern Shan State have gone ahead?

Perhaps, but perhaps not. However the fact that China is making its southwestern neighbor aware of its military capabilities sends a message hard to ignore.

It is highly likely that Chinese patience and its committed policy of respecting sovereignty will be put to the test in the coming months—not only in containing the Kachin conflict, but also in protecting a vital pipeline from sabotage.

Naypyitaw must realize that time is running out to agree a concrete ceasefire with the KIA if its wants to avoid putting its Chinese counterparts in that very position.

A soon-to-be completed gas pipeline connecting the Indian Ocean coast of Myanmar with southwest China may help China avoid military obstacles set up by the United States, reports the Voice of Russia, an international broadcaster based in Moscow.

The state-owned China National Petroleum Corporation, which built the pipeline, announced on Monday that the 793-kilometer pipeline would become fully operational by May 30, less than three years after construction began.

The schedule of the pipeline was decided at an emergency Sino-Myanmar military meeting due to worsening violence between the Myanmar government and ethnic Kachins in the country’s north, not far from the country’s border with China.

The pipeline will help free China from its dependence on the Strait of Malacca for its energy imports, giving it a shorter and alternate supply route that also helps evade military obstacles from the United States, according to the Financial Times, adding that the pipeline is not only an issue of energy but also of strategic safety.

Countries in Southeast Asia including Myanmar have become the center of a silent conflict of interests between China and the US, with the latter attempting to develop its relations with those countries to restrict China’s growing power. Washington has already strengthened its cooperation with India and has established a new military base in the Asia-Pacific region through Australia.

The new gas pipeline will reportedly be able to carry 12 billion cubic meters of gas and 22 million tons of imported crude oil to China every year.

The pipeline offers China “an alternative supply route if the Strait of Malacca were ever blocked because of terrorism, piracy or conflict,” Stephanie Kleine-Ahlbrandt, director of North East Asia Project at the International Crisis Group, told the Financial Times.

“Beijing also fears that the straits could be threatened or cut off by the US if there was ever a conflict between the countries in the Taiwan Strait or elsewhere,” the director added.

According to the Global Times, a tabloid under the auspices of the Communist Party mouthpiece People’s Daily, the pipeline appears to have given China an advantage in its strategic conflict with the US, though whether the advantage will last remains to be seen.